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HomeUncategorizedNexo allocates another $50 million to its token buyback program

Nexo allocates another $50 million to its token buyback program

Cryptocurrency exchange Nexo announced on August 30 this year that it has allocated an additional $50 million for a discretionary and regular repurchase of its NEXO tokens on the open market.

According to the company’s statement, this will be the second time the exchange has invested in buying back its tokens this year. The first was in May, when they announced a buyback of $100 million in NEXO tokens.

Nexo wants to demonstrate its liquidity

Antoni Trenchev, co-founder and managing partner of Nexo says the $50 million The grant indicates that the company maintains a “solid liquidity position” at a time when many cryptocurrency exchanges have had to shut down operations.

“The additional allocation of $50 million to our repurchase program is due to our solid liquidity position and Nexo’s ability and readiness to stimulate its own products, tokens and community, as well as its externally-facing injection program liquidity into the industry,”

Trenchev added that despite a “challenging market environment,” the company and The NEXO token has been developing in sync with BTC and ETH, proving the stability and demand of the asset. Currently, Nexo’s total market capitalization is over $581 million, according to CoinMarketCap.

Price of the NEXO token. Image: Tradingview
2022 NEXO token price. Image: Tradingview

$50M buyback is almost 10% of total token capitalization %. However, according to NEXO, the buyback will take place within 6 months “subject to market conditions” so as not to affect the price of the token.

The repurchased tokens will be frozen for 12 months

The exchange pointed out that the repurchased tokens will be locked and stored in NEXO’s Investor Protection Reserve (IPR) for 12 months with a vesting period. Once this period expires, the company will be able to use the tokens to pay day-to-day interest or make strategic investments through “token pooling.”

“Once the lock-up period has elapsed, the repurchased tokens may be used exclusively for daily interest payments on NEXO tokens and through token consolidation with applicable The vesting plans to make strategic investments to ensure the interests of token holders.”

This means that the exchange is obliged to burn its NEXO tokens to reduce its total The market supply is not interested, as Binance has been doing, “burning” large amounts of its native Binance Coin (BNB) cryptocurrency to increase the value of the token by reducing its supply.

Nexo has proven that it is capable of earning a place among the big boys of the crypto industry. While several exchanges face bankruptcy and layoffs, Nexo announced a 200% increase in staff over the past 12 months, while continuing to invest millions of dollars to continue to expand its reach.

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